Jerry: Do you know what’s the number one cause of bankruptcy nationwide?
Carrie: Credit cards?
Jerry: Nope. It’s medical debt, according to a 2019 Harvard University study. It causes over 62 percent of all bankruptcies.
Carrie: Medical debt causes enormous misery. But what offends me are the unscrupulous medical debt collection firms that turn small unpaid medical bills into gigantic multi-thousand dollar debts.
Jerry: Like the recent case where a Melaleuca employee had a $294 unpaid medical bill balloon into a $5,000 debt claim because of excessive legal fees charged by Medical Recovery Services and their law firm, Smith Driscoll and Associates?
Carrie: Yes. Idaho Falls Rep. Bryan Zollinger was the medical debt collection attorney named on the original case. In fact, from 2016 to 2018, he was the attorney named in over 5,000 lawsuits filed by Medical Recovery Services against Idahoans with medical debts. Two-thirds of those cases were here in Bonneville County.
Jerry: It astonishes me that what Medical Recovery Services and Smith Driscoll & Associates are doing is legal. There’s no law stopping them from adding gigantic legal fees to the patient’s debt. Their fees often exceed, many times over, the original debt itself.
Carrie: That’s why Melaleuca CEO Frank Vandersloot has proposed a bill called the Idaho Patient Act (House Bill 425), which requires medical billing transparency and caps legal fees on collections. It was introduced into the Idaho House Business Committee last Wednesday.
Jerry: What’s in the bill?
Carrie: It requires health care providers to submit all bills to the patient’s insurance within 45 days. If they aren’t insured, the bill goes directly to the patient.
Jerry: So, this includes hospitals, urgent care facilities, surgical centers, rehabilitation centers, laboratories, imaging facilities, and medical doctors?
Carrie: Yes. Within 60 days of the patient’s service, the health care facility must provide a “Consolidated Summary of Services” with names and contact info for all medical providers who are billing the patient separately.
Jerry: That will help people understand exactly who they owe and why. It shouldn’t be difficult to generate in this age of computerized information.
Carrie: Next, each health care provider must provide the patient with a final statement showing all the charges, the amount covered by insurance and any balance owed by the patient. Because health care providers and insurers need time to accurately work out the charges, there is no deadline for issuing the final bill.
Jerry: Then, after issuing the final bill, they must wait 60 days before they can turn the account over to a collection agency or charge interest.
Carrie: At that point, the collection agency can notify the patient they have their debt. But the agency can’t notify credit reporting agencies or begin any legal action, liens, seize bank accounts or garnish wages until 180 days from the final statement.
Jerry: Because medical debts are often unexpected and unplanned for, this gives the patient time to figure out ways to pay what they owe.
Carrie: Another requirement of the Idaho Patient Act is that legal fees for uncontested court cases would be capped at $350 or no more than 100 percent of the original debt, whichever is less. For contested cases, the cap is $750 or no more than 100 percent of the original debt, whichever is less.
Jerry: Hallelujah. If the Idaho Patient Act is enacted, it will prevent unscrupulous debt collectors from adding more misery to people, especially those living on limited means. Do you think the Legislature will pass the bill?
Carrie: It will pass if enough people ask their legislators to support it. We have included the email addresses of key legislators and urge folks to contact them.
Jerry: As somebody once said, “The power of the people is much stronger than the people in power.”
Carrie: Let’s prove them right.